G B P Warning For Brits; Possible Sterling Crisis !

[LPCustom69]

How do we know that the thai printing presses haven't been running overtime for years, as in other countries.

dont worry!!!!!!! the thai baht is going nowhere but down the drain too, with the state of tourism and the greedy thais putting prices up and not down! so all will level out. the british pound has got a lot better chance of recovering than the thai baht will have in the future for sure!!!!

[LaoPo]

Integrity - A+

I was hoping for a triple A+++ but thank you nevertheless!

LaoPo

I give A-.

As with all propaganda it is the original (erroneous) comment that has the impact - not the retraction/correction.

Get a life and stop reading your own avatar...

LaoPo

[caf]

CM writes 'nice to have you on board'

Hardly, I'm very much on the good ship Sterling, but all I can see is very choppy waters at present, hence I think it will drop to 50 and my very worst case scenario is 45.

The pound is fairly priced against most currencies at present, save the Euro and Bt which are both over priced IMHO.

But there we are, no doubt the pendulum will swing.

I don't think a crumble is possible really, but I certainly don't see any meteoric rises save against currencies that weaken of their own accord, the bt could be one of those but again I don't think so at present.

That was intended of course to be very much tongue in cheek in light of recent chats. But yes I don't disagree, GBP seems fairly priced at present although I'm not sure I agree that THB is over priced. And whilst my money is mostly on the good ship Sterling also, my sentiment, longer term, is on THB, as you know only too well. If I extend out a fairly priced GBP against what I think is possibly also a fairly priced THB, over ten years, GBP/THB at 40 is not only impossible it's probable.

Forget currency. Look at the fundamentals.

Ask yourself what the Uk and thaialnd will be like in 10 years time.

Do you see thailand as stable politically or economically in 10 years. They cant keep supporting the baht.

The pendulum effect may influence western economies so gbp may well swing. but in thailand? i think not.

sterling may not strengthen but the baht long term looks like weakening significantly.

Posters talking about the short term should first look at the last 365 trend before posting.

Short term, volatilty as the uk struggles with the economy and there will probably be support for the baht. Long term less volatilty of the gbp but weakening of the baht.

[caf]

How do we know that the thai printing presses haven't been running overtime for years, as in other countries.

dont worry!!!!!!! the thai baht is going nowhere but down the drain too, with the state of tourism and the greedy thais putting prices up and not down! so all will level out. the british pound has got a lot better chance of recovering than the thai baht will have in the future for sure!!!!

Actually we do know they've been supporting the baht over the years - more than cenntral supportb for the dollar and gbp

but they are going to run out long term. the baht is only going one way long term

[Thai at Heart]

How do we know that the thai printing presses haven't been running overtime for years, as in other countries.

dont worry!!!!!!! the thai baht is going nowhere but down the drain too, with the state of tourism and the greedy thais putting prices up and not down! so all will level out. the british pound has got a lot better chance of recovering than the thai baht will have in the future for sure!!!!

Actually we do know they've been supporting the baht over the years - more than cenntral supportb for the dollar and gbp

but they are going to run out long term. the baht is only going one way long term

In the long term the sky might fall on our heads too. The baht will strengthen and weaken with the wind in the "long run". But I don't believe it will go into another crash/crisis.

The fundamentals of the Thai/Asian economy are in total opposition to those of 97. Thailand has have moved since 97(maybe too far) to being an export economy so have a current account surplus. The nature of this export business is heavily reliant on imports. They have no customers so are importing less, but are still in a surplus.

A massive increase in the oil price could push them into a current account deficit situation, but right now that doesn't look like happening. Their banks have been largely very conservative in their lending having existing bad debts and getting their fingers burnt in 97. If anything, if we wanted a weaker currency, we should blame the domestic banks for being too conservative and leaving all this toxic business alone, and concentrating on making money from ATM transfers and charging 100 baht to print a statement.

In some ways, the mess in the western financial system is a mirror image of what happened in Asia in 97. Current account deficits and reckless real estate lending that couldn't be paid. The accumulated "brains" at Fannie/Freddie, and AIG have an awful lot to answer for. No amount of mixing and matching with CDO's can hide the fact that millions of mortgages were given to people who had absolutely no hope of paying. Financing property purchases over 30 years is a very different business than financing a car over 5.

To those who asked if people knew and why they didn't do something about it, I would reckon it would be simple enough to look at the banks and financial regulating systems who believed CDO's were fundamentally misrepresenting the amount of risk involved in investing in them. Just as in 97 a lot of people made the fundamental mistake of believing that the price of property ALWAYS goes up in value.

The "dream" that every person in an economy owns their own house is exactly that.

Edited July 11, 2009 by Thai at Heart

[chiang mai]

How do we know that the thai printing presses haven't been running overtime for years, as in other countries.

dont worry!!!!!!! the thai baht is going nowhere but down the drain too, with the state of tourism and the greedy thais putting prices up and not down! so all will level out. the british pound has got a lot better chance of recovering than the thai baht will have in the future for sure!!!!

Actually we do know they've been supporting the baht over the years - more than cenntral supportb for the dollar and gbp

but they are going to run out long term. the baht is only going one way long term

We do know the BOT has been "supporting" the Baht to, a) ensure there are no sudden and significant movements against USD, the currency in which export bills are settled, and to ensure it remains comparable with other regional currencies. We do not know that the Baht has been supported in any other ways, unless you know of some?

As for greedy Thai's putting up prices and the fall in tourist numbers: tourism only accounts for 7% of GDP and if the Thai's want to put up their prices, so be it. So with a healthy looking current account and and excellent foreign reserves, do you have any other meaningful reasons, supported by evidence, as to why the Baht should not remain strong or is it just your intuition!

Edited July 11, 2009 by chiang mai

[chiang mai]

How do we know that the thai printing presses haven't been running overtime for years, as in other countries.

dont worry!!!!!!! the thai baht is going nowhere but down the drain too, with the state of tourism and the greedy thais putting prices up and not down! so all will level out. the british pound has got a lot better chance of recovering than the thai baht will have in the future for sure!!!!

Actually we do know they've been supporting the baht over the years - more than cenntral supportb for the dollar and gbp

but they are going to run out long term. the baht is only going one way long term

In the long term the sky might fall on our heads too. The baht will strengthen and weaken with the wind in the "long run". But I don't believe it will go into another crash/crisis.

The fundamentals of the Thai/Asian economy are in total opposition to those of 97. Thailand has have moved since 97(maybe too far) to being an export economy so have a current account surplus. The nature of this export business is heavily reliant on imports. They have no customers so are importing less, but are still in a surplus.

A massive increase in the oil price could push them into a current account deficit situation, but right now that doesn't look like happening. Their banks have been largely very conservative in their lending having existing bad debts and getting their fingers burnt in 97. If anything, if we wanted a weaker currency, we should blame the domestic banks for being too conservative and leaving all this toxic business alone, and concentrating on making money from ATM transfers and charging 100 baht to print a statement.

In some ways, the mess in the western financial system is a mirror image of what happened in Asia in 97. Current account deficits and reckless real estate lending that couldn't be paid. The accumulated "brains" at Fannie/Freddie, and AIG have an awful lot to answer for. No amount of mixing and matching with CDO's can hide the fact that millions of mortgages were given to people who had absolutely no hope of paying. Financing property purchases over 30 years is a very different business than financing a car over 5.

To those who asked if people knew and why they didn't do something about it, I would reckon it would be simple enough to look at the banks and financial regulating systems who believed CDO's were fundamentally misrepresenting the amount of risk involved in investing in them. Just as in 97 a lot of people made the fundamental mistake of believing that the price of property ALWAYS goes up in value.

The "dream" that every person in an economy owns their own house is exactly that.

Just for the record and mostly for the benefit of others, Thai banks have very very little exposure to sub prime related debt. Also, one of the major advances made as a result of the 97 crash was the creation of an independent central bank which is now quite highly regarded.

[thaimate]

If i went to bed and slept for 5 years ,you can forget pounds ,dollars and Thai baht ,when i opened that suitcase i would like to find a scantilly clad and smiling Billy Pipper

[chiang mai]

If i went to bed and slept for 5 years ,you can forget pounds ,dollars and Thai baht ,when i opened that suitcase i would like to find a scantilly clad and smiling Billy Pipper

Would you still feel the same way if the timeframe were say fifty years and not five!

[mommysboy]

CM wrote -

"That was intended of course to be very much tongue in cheek in light of recent chats. But yes I don't disagree, GBP seems fairly priced at present although I'm not sure I agree that THB is over priced. And whilst my money is mostly on the good ship Sterling also, my sentiment, longer term, is on THB, as you know only too well. If I extend out a fairly priced GBP against what I think is possibly also a fairly priced THB, over ten years, GBP/THB at 40 is not only impossible it's probable."

I'm assumimg you also mean the bt will be high against the dollar too, in which case I'd say the most compelling argument for the bt to weaken is that it would simply have to.

Otherwise Thailand (possibly much of Asia too) will simply be priced out of the market. Even now there must be an increasing case for the US to start making its own components. And just think of the implications if the Thai bt strengthened to say 28bt.

I don't think we can say probable at all. Certainly the UK will be subject to stringent public spending cuts and there's no way of spending it's way out of the crisis and creating yet another debt bubble; and in this respect three cheers for that, but this also applies to many advanced countries and Asia is still very much dependent on them for demand. Thailand may well experience significant debt problems too due to a shortfall in govt revenue and the need for higher borrowing. If it's to avoid a severe recession there will need to be much larger injections of capital. Previously Thailand had relied on Mr Farang to do just that and on very attractive terms too, but not anymore for obvious reasons.

So it really boils down to everyone being in the same or similar dire straits one way or another, and thus I'd be surprised if there were any major devaluations here on in.

[chiang mai]

I'm also having problems with quoting on this site, but regardless. MMB wrote:

"I assume you also mean the bt will be high against the dollar too, (Yes) in which case I'd say the most compelling argument for the bt to weaken is that it would simply have to".

Why?

[mommysboy]

I'm also having problems with quoting on this site, but regardless. MMB wrote:

"I assume you also mean the bt will be high against the dollar too, (Yes) in which case I'd say the most compelling argument for the bt to weaken is that it would simply have to".

Why?

Thailand has had very sound public finances and has balanced it's books very well, but that is only one part of the equation. In order to grow an economy needs to be heavily creating, spending and consuming, especially a semi mature one like Thailand with a large and expectant population. And what has happened over here is a very severe contraction. So much so the government has had to borrow heavily, and will do so again next year. That in itself will have a moderating effect on the currency in the medium term.

With modern economies, even 3% falls in GDP can be very damaging if not made up elsewhere, and Thailand has experienced a fall across all sectors I think, exports in particular have fallen dramatically.

Thailand has an export driven economy and shortfalls could not be made up in any other way than through exports to the west IMHO. The notion that Thailand can simply tap in to an alternative market isn't sound, as economies like Japan and S.Korea are in the middle of a recession too. As it is, demand is weak, and the west has less spending power anyway, so issues of affordability come to the fore. Similarly it's erroneous to think these people will simply return to the rural/feudal ideal that never was.

So a strong bt will be ruinous to the Thai economy, and this is the sense in which I mean it will simply have to fall, must fall, regardless of what the text books say, otherwise the consequences for Thailand will be awful.

The only other way would be to cut prices by 20% or so, but I don't see that happening.

Effectively western nations such as USA, and UK have undergone a 30% or so devaluation in their assets, and indeed it seems the world is worth 30% less than a year or two ago. No matter what assets Thailand has they are only worth what someone else can pay. Something needs to give! Thailand is snookered, ironically by it's own economic soundness.

[roamer]

I'm also having problems with quoting on this site, but regardless. MMB wrote:

"I assume you also mean the bt will be high against the dollar too, (Yes) in which case I'd say the most compelling argument for the bt to weaken is that it would simply have to".

Why?

Thailand has had very sound public finances and has balanced it's books very well, but that is only one part of the equation. In order to grow an economy needs to be heavily creating, spending and consuming, especially a semi mature one like Thailand with a large and expectant population. And what has happened over here is a very severe contraction. So much so the government has had to borrow heavily, and will do so again next year. That in itself will have a moderating effect on the currency in the medium term.

With modern economies, even 3% falls in GDP can be very damaging if not made up elsewhere, and Thailand has experienced a fall across all sectors I think, exports in particular have fallen dramatically.

Thailand has an export driven economy and shortfalls could not be made up in any other way than through exports to the west IMHO. The notion that Thailand can simply tap in to an alternative market isn't sound, as economies like Japan and S.Korea are in the middle of a recession too. As it is, demand is weak, and the west has less spending power anyway, so issues of affordability come to the fore. Similarly it's erroneous to think these people will simply return to the rural/feudal ideal that never was.

So a strong bt will be ruinous to the Thai economy, and this is the sense in which I mean it will simply have to fall, must fall, regardless of what the text books say, otherwise the consequences for Thailand will be awful.

The only other way would be to cut prices by 20% or so, but I don't see that happening.

Effectively western nations such as USA, and UK have undergone a 30% or so devaluation in their assets, and indeed it seems the world is worth 30% less than a year or two ago. No matter what assets Thailand has they are only worth what someone else can pay. Something needs to give! Thailand is snookered, ironically by it's own economic soundness.

I'm in complete agreement with you, and that's without throwing into the cauldron the political and monarchy issues, and an intractable war in the deep south. Simple fact is that Thailand is headed in the wrong direction but thinks by waiting that when the world economy resurrects itself the boom years will be back again. What I actually think will happen is that Thailand will find the carnival has moved on. There will be cheaper producers for much of its exports, major multinationals will have moved their manufacturing bases to places that are more stable, less corrupt or bureaucratic and cheaper, And a generation of children that should have been preparing for their future instead of spending every available hour gameplaying in internet cafes are going to be lucky to find even "Mac" jobs.

[chiang mai]

I'm also having problems with quoting on this site, but regardless. MMB wrote:

"I assume you also mean the bt will be high against the dollar too, (Yes) in which case I'd say the most compelling argument for the bt to weaken is that it would simply have to".

Why?

Thailand has had very sound public finances and has balanced it's books very well, but that is only one part of the equation. In order to grow an economy needs to be heavily creating, spending and consuming, especially a semi mature one like Thailand with a large and expectant population. And what has happened over here is a very severe contraction. So much so the government has had to borrow heavily, and will do so again next year. That in itself will have a moderating effect on the currency in the medium term.

With modern economies, even 3% falls in GDP can be very damaging if not made up elsewhere, and Thailand has experienced a fall across all sectors I think, exports in particular have fallen dramatically.

Thailand has an export driven economy and shortfalls could not be made up in any other way than through exports to the west IMHO. The notion that Thailand can simply tap in to an alternative market isn't sound, as economies like Japan and S.Korea are in the middle of a recession too. As it is, demand is weak, and the west has less spending power anyway, so issues of affordability come to the fore. Similarly it's erroneous to think these people will simply return to the rural/feudal ideal that never was.

So a strong bt will be ruinous to the Thai economy, and this is the sense in which I mean it will simply have to fall, must fall, regardless of what the text books say, otherwise the consequences for Thailand will be awful.

The only other way would be to cut prices by 20% or so, but I don't see that happening.

Effectively western nations such as USA, and UK have undergone a 30% or so devaluation in their assets, and indeed it seems the world is worth 30% less than a year or two ago. No matter what assets Thailand has they are only worth what someone else can pay. Something needs to give! Thailand is snookered, ironically by it's own economic soundness.

A very good post.

[Thai at Heart]

I'm also having problems with quoting on this site, but regardless. MMB wrote:

"I assume you also mean the bt will be high against the dollar too, (Yes) in which case I'd say the most compelling argument for the bt to weaken is that it would simply have to".

Why?

Thailand has had very sound public finances and has balanced it's books very well, but that is only one part of the equation. In order to grow an economy needs to be heavily creating, spending and consuming, especially a semi mature one like Thailand with a large and expectant population. And what has happened over here is a very severe contraction. So much so the government has had to borrow heavily, and will do so again next year. That in itself will have a moderating effect on the currency in the medium term.

With modern economies, even 3% falls in GDP can be very damaging if not made up elsewhere, and Thailand has experienced a fall across all sectors I think, exports in particular have fallen dramatically.

Thailand has an export driven economy and shortfalls could not be made up in any other way than through exports to the west IMHO. The notion that Thailand can simply tap in to an alternative market isn't sound, as economies like Japan and S.Korea are in the middle of a recession too. As it is, demand is weak, and the west has less spending power anyway, so issues of affordability come to the fore. Similarly it's erroneous to think these people will simply return to the rural/feudal ideal that never was.

So a strong bt will be ruinous to the Thai economy, and this is the sense in which I mean it will simply have to fall, must fall, regardless of what the text books say, otherwise the consequences for Thailand will be awful.

The only other way would be to cut prices by 20% or so, but I don't see that happening.

Effectively western nations such as USA, and UK have undergone a 30% or so devaluation in their assets, and indeed it seems the world is worth 30% less than a year or two ago. No matter what assets Thailand has they are only worth what someone else can pay. Something needs to give! Thailand is snookered, ironically by it's own economic soundness.

Indeed an insightful post. However, the consequences of a managed devaluation could be similarly troublesome with probably no guarantee that it would create the desired outcome of getting the economy moving. Thailand has missed one huge chance to invest in it's population's education during the last 40 years of development.

Thailand engages in some export industries that are not very mobile due to sunk capital i.e. motor cars which have established themselves in Thailand with all their engaged suppliers. To move them is possible, but a difficult proposition for companies. The very problem it faces is that it still has many large producers of low value added products who have been and will continue to be eaten alive by China. Textiles or basic electronics are a perfect example. The portion of imports in many exports from Thailand is also substantial, so devaluing the exchange rate simply pushes up the price of inputs.

I am not saying that this goes for all industries in Thailand, but almost no level of tolerable exchange rate devaluation would make industries like textiles competitive with China. Thailand could have educated it's workforce in the last 30 years and today Thailand could truly be a hub of several higher value added industries beyond those that rely on cheap import/assembly/export.

They might choose to devalue, and as you say, fundamentally, there isn't a reason to do it. I reckon it will keep fluctuating around 33 to 37 for the forseable future.

[LaoPo]

G B P Warning For Brits; Possible Sterling Crisis !

Gents....although I find the discussion fascinating, especially about the Thai economy and it's future, I kindly suggest we stay on topic about the GBP and it's possible crisis, to come...or not.

That alone (the valuation of the GBP) is of great importance as well, especially for the Brits and people doing business with/in GB and the GBP currency.

Q: will the GBP slide or not, and if so, how much and when ?

LaoPo

[roamer]

G B P Warning For Brits; Possible Sterling Crisis !

Gents....although I find the discussion fascinating, especially about the Thai economy and it's future, I kindly suggest we stay on topic about the GBP and it's possible crisis, to come...or not.

That alone (the valuation of the GBP) is of great importance as well, especially for the Brits and people doing business with/in GB and the GBP currency.

Q: will the GBP slide or not, and if so, how much and when ?

LaoPo

No dramatic movements whilst the rest of the world is still grappling with the crisis and then provided the right economic belt-tightening takes place I see no reason for a run on sterling.

[chiang mai]

G B P Warning For Brits; Possible Sterling Crisis !

Gents....although I find the discussion fascinating, especially about the Thai economy and it's future, I kindly suggest we stay on topic about the GBP and it's possible crisis, to come...or not.

That alone (the valuation of the GBP) is of great importance as well, especially for the Brits and people doing business with/in GB and the GBP currency.

Q: will the GBP slide or not, and if so, how much and when ?

LaoPo

I'm on record as having said that THB will hold its value against GBP and in the longer term it will strengthen - the mid term remains unclear.

[Chaimai]

No dramatic movements whilst the rest of the world is still grappling with the crisis and then provided the right economic belt-tightening takes place I see no reason for a run on sterling.

Exactly my thoughts - however, I don't know how much those thoughts are influenced by the vested interest I have in Sterling improving against the Baht and US$.

[LaoPo]

G B P Warning For Brits; Possible Sterling Crisis !

Gents....although I find the discussion fascinating, especially about the Thai economy and it's future, I kindly suggest we stay on topic about the GBP and it's possible crisis, to come...or not.

That alone (the valuation of the GBP) is of great importance as well, especially for the Brits and people doing business with/in GB and the GBP currency.

Q: will the GBP slide or not, and if so, how much and when ?

LaoPo

I'm on record as having said that THB will hold its value against GBP and in the longer term it will strengthen - the mid term remains unclear.

Although the Thai Baht versus GBP is of importance to British tourists* and -expats the real importance lies in the exchange rates with the major world currencies like the US$, Euro and Yen.

The UK is facing a deficit of more than 12% of the GDP in 2009 which is enormous and mind boggling. The government has to borrow lots and lots of money whilst at the same time they have to cut deep into government spending. Tax hikes are next and around the corner.

Not a pretty sight...

* 750.000 British tourists to Thailand in 2007 but I fear this number will be a lot lower for 2008 and dramatic lower in 2009.

500.000 or lower in 2009 wouldn't surprise me at all.

LaoPo

[caf]

I'm also having problems with quoting on this site, but regardless. MMB wrote:

"I assume you also mean the bt will be high against the dollar too, (Yes) in which case I'd say the most compelling argument for the bt to weaken is that it would simply have to".

Why?

Thailand has had very sound public finances and has balanced it's books very well, but that is only one part of the equation. In order to grow an economy needs to be heavily creating, spending and consuming, especially a semi mature one like Thailand with a large and expectant population. And what has happened over here is a very severe contraction. So much so the government has had to borrow heavily, and will do so again next year. That in itself will have a moderating effect on the currency in the medium term.

With modern economies, even 3% falls in GDP can be very damaging if not made up elsewhere, and Thailand has experienced a fall across all sectors I think, exports in particular have fallen dramatically.

Thailand has an export driven economy and shortfalls could not be made up in any other way than through exports to the west IMHO. The notion that Thailand can simply tap in to an alternative market isn't sound, as economies like Japan and S.Korea are in the middle of a recession too. As it is, demand is weak, and the west has less spending power anyway, so issues of affordability come to the fore. Similarly it's erroneous to think these people will simply return to the rural/feudal ideal that never was.

So a strong bt will be ruinous to the Thai economy, and this is the sense in which I mean it will simply have to fall, must fall, regardless of what the text books say, otherwise the consequences for Thailand will be awful.

The only other way would be to cut prices by 20% or so, but I don't see that happening.

Effectively western nations such as USA, and UK have undergone a 30% or so devaluation in their assets, and indeed it seems the world is worth 30% less than a year or two ago. No matter what assets Thailand has they are only worth what someone else can pay. Something needs to give! Thailand is snookered, ironically by it's own economic soundness.

I'm in complete agreement with you, and that's without throwing into the cauldron the political and monarchy issues, and an intractable war in the deep south. Simple fact is that Thailand is headed in the wrong direction but thinks by waiting that when the world economy resurrects itself the boom years will be back again. What I actually think will happen is that Thailand will find the carnival has moved on. There will be cheaper producers for much of its exports, major multinationals will have moved their manufacturing bases to places that are more stable, less corrupt or bureaucratic and cheaper, And a generation of children that should have been preparing for their future instead of spending every available hour gameplaying in internet cafes are going to be lucky to find even "Mac" jobs.

A good reply.

Some of the other posters are throwing comments and figures around without thinking calmly and slowly about FUTURE FUNDAMENTALS

Taking your metaphor, they SHOULD be throwing a few things into the cauldron

I can't predict a precise future baht rate but long term it will significantly weaken

The UK will get out of its present mess though it will take some time, precisely because we accept what the mess is. Thailand's difficulty is that it does not want to see what is likely in the future.

It is in denial on the true percentage of the tourist percentage of gdp, so one can hardly rely on any other figures particularly on baht support.

[caf]

How do we know that the thai printing presses haven't been running overtime for years, as in other countries.

dont worry!!!!!!! the thai baht is going nowhere but down the drain too, with the state of tourism and the greedy thais putting prices up and not down! so all will level out. the british pound has got a lot better chance of recovering than the thai baht will have in the future for sure!!!!

Actually we do know they've been supporting the baht over the years - more than cenntral supportb for the dollar and gbp

but they are going to run out long term. the baht is only going one way long term

We do know the BOT has been "supporting" the Baht to, a) ensure there are no sudden and significant movements against USD, the currency in which export bills are settled, and to ensure it remains comparable with other regional currencies. We do not know that the Baht has been supported in any other ways, unless you know of some?

As for greedy Thai's putting up prices and the fall in tourist numbers: tourism only accounts for 7% of GDP and if the Thai's want to put up their prices, so be it. So with a healthy looking current account and and excellent foreign reserves, do you have any other meaningful reasons, supported by evidence, as to why the Baht should not remain strong or is it just your intuition!

You say remaining strong. Have you looked at the last 365 day trend? It has been weakening.

No-one has precise figures on the level of baht support. One makes a judgment on that by stripping out the effect of fundamentals and guestimating what the level of support must have been. I agree, not a precise science. The nearest answer I got some months ago from a currency trader was " bucket loads" Excellent foreign reserves? Really?

If you believe 7% is the correct figure for tourist gdp then you are probably relying too heavily on publishd data for all your arguments.

The UK problem will find a solution - painful and slow; but will Thailand even admit what it needs to do.

[chiang mai]

For CAF:

You say remaining strong. Have you looked at the last 365 day trend? It has been weakening.

No-one has precise figures on the level of baht support. One makes a judgment on that by stripping out the effect of fundamentals and guestimating what the level of support must have been. I agree, not a precise science. The nearest answer I got some months ago from a currency trader was " bucket loads" Excellent foreign reserves? Really?

If you believe 7% is the correct figure for tourist gdp then you are probably relying too heavily on publishd data for all your arguments.

The UK problem will find a solution - painful and slow; but will Thailand even admit what it needs to do.

I don't know what you think has been weakening this past year but it certainly isn't the Baht against the Sterling so best you go look at that one again!!

Foreign reserves, 120 billion and rising.

And if we are not to believe that tourism is 7% of GDP, what number would you suggest and from what source!

[mommysboy]

G B P Warning For Brits; Possible Sterling Crisis !

Gents....although I find the discussion fascinating, especially about the Thai economy and it's future, I kindly suggest we stay on topic about the GBP and it's possible crisis, to come...or not.

That alone (the valuation of the GBP) is of great importance as well, especially for the Brits and people doing business with/in GB and the GBP currency.

Q: will the GBP slide or not, and if so, how much and when ?

LaoPo

Topics about the Thai bt. and 7% tourism GDP (or not) deserve whole forums to themselves.

The pound will not crumble in my opinion, and slide may be wrong too.

It's sinking a little as the rebound was too strong too soon.

When you think of the concern caused over the Ukrainian currency and the decision to avoid devaluation (what's it called?- let's go for the 'Kraina' sounds good.), then you can see that devaluation would just not 'be allowed' to happen to sterling, and anyway it did take rather a 'pounding'.

Although public finances are in a truly cxxx state, they are not the worst ever, and the 'accidental leaks' coming out of UK seem to be softening the public up for some pretty massive public spending cuts and tax rises- the party's over, there's a lot of clearing up to be done and there will be no boom times for many years to come. And there's justice in that!

Nevertheless the economy is already stabilising and seemingly the currency too.

As to the stories that come out, well every couple of months some semi influential American commentator comes out with a prediction of the demise of the pound/UK, last time it was Soros, a currency speculator. Maybe some big syndicate has gone short on the pound. They'll clear up this week and be riding t

he other horse next.

[Spee]

Although the Thai Baht versus GBP is of importance to British tourists* and -expats the real importance lies in the exchange rates with the major world currencies like the US$, Euro and Yen.

The UK is facing a deficit of more than 12% of the GDP in 2009 which is enormous and mind boggling. The government has to borrow lots and lots of money whilst at the same time they have to cut deep into government spending. Tax hikes are next and around the corner.

Not a pretty sight...

Unfortunately, there is only one inevitability on the horizon with the USD. That is massive inflation. The government is printing money like it is going out of style. If they keep it up, it will be. My concern is how much massive US inflation is going to affect Thailand. Will this cause the Middle East countries to pull their currencies off of a fixed exchange rate to the USD? If so, what effect will this cause on the price of oil? Can the Thai economy withstand spiraling out of control inflation in other countries? Is the Thai economy strong enough.

[caf]

For CAF:

You say remaining strong. Have you looked at the last 365 day trend? It has been weakening.

No-one has precise figures on the level of baht support. One makes a judgment on that by stripping out the effect of fundamentals and guestimating what the level of support must have been. I agree, not a precise science. The nearest answer I got some months ago from a currency trader was " bucket loads" Excellent foreign reserves? Really?

If you believe 7% is the correct figure for tourist gdp then you are probably relying too heavily on publishd data for all your arguments.

The UK problem will find a solution - painful and slow; but will Thailand even admit what it needs to do.

I don't know what you think has been weakening this past year but it certainly isn't the Baht against the Sterling so best you go look at that one again!!

Foreign reserves, 120 billion and rising.

And if we are not to believe that tourism is 7% of GDP, what number would you suggest and from what source!

---------------------------------------

My profuse apologies. I should have said 120 days

the lowest was 47.5913 on jan 23 the highest 56.4956 on june 20. between those dates an upward trend

the baht is weakening relative to sterling over the 120 term.

given that there are fundamentals which are weakening sterling then the baht must be weakening more

the baht may strengthen in the next few days months but my point is i think it willl weaken significantly long term given future events

the rate will depend on events in the uk and thailand

economics, politics, and support are three of the factors in both countries that have an influence.

the only source i know shows 7% but that does not mean that i or others believe it. the definition is quite narrow and excludes trade linked to tourism and some cash inflows that are lost in the statistics ( if there were no tourists or farang would the drop be only 7%. )

[caf]

"The UK is facing a deficit of more than 12% of the GDP in 2009 which is enormous and mind boggling. The government has to borrow lots and lots of money whilst at the same time they have to cut deep into government spending. Tax hikes are next and around the corner.

Not a pretty sight... "

I agree but those actions will strengthen sterling

the sterling baht rate will depend not only on that, as you rightly say, but also on events here and what is done about them.

[sanmiguellight]

Unemployment (people claiming benefits) is going up by 100,000 a month the UK economy is anything but stabilising.

[Thongkorn]

As I remember the last time the IMF told The Uk that We were not up to standards, and through us out , The pound flurished, The Euro is unstable, because of the down turn in the world econamy, Small Countries cannot keep contributing to the IMF, to keep the value of the Euro High.The dollor is used by countries that are not American so that can affect its value,The Russian ruble has its problems , So has the Chines yen, Even India , Britain is not a safe bet but I would put my Money on it to recover better than most, At least Britain has admited the problem and has started to deal with it , Other Countrys have just ignored it and hope it goes away , or have not exactly told the truth, as to how much trouble they are in ,

[LaoPo]

As I remember the last time the IMF told The Uk that We were not up to standards, and through us out , The pound flurished, The Euro is unstable, because of the down turn in the world econamy, Small Countries cannot keep contributing to the IMF, to keep the value of the Euro High.The dollor is used by countries that are not American so that can affect its value,The Russian ruble has its problems , So has the Chines yen, Even India , Britain is not a safe bet but I would put my Money on it to recover better than most, At least Britain has admited the problem and has started to deal with it , Other Countrys have just ignored it and hope it goes away , or have not exactly told the truth, as to how much trouble they are in ,

1. China has the Renminbi currency, shortened RMB, which consists of Yuan units. Japan has the Yen.

2. That's pure nonsense. Every single country in the world is fully aware about their own current financial and economical problems.

Now you suggest that Britain is the only country that has shown it's bare butt by admitting it's problems and is honest to itself and their citizens....really ?

I think you will burn yourself quite severely when you put all of your money on the GBP and/or in the country's assets now like you say.

LaoPo